So… What’s next? After our last post about Microsoft and its future, it’s Google’s turn. First of all, a bit of history.
Sergey Brin and Larry Page, two Stanford University doctorate students, came from academic families and were set on technology careers. In 1997, after some brainstorming, they gave the nam Google to the search engine that they were developing, then called BackRub. The funny thing being that their first underwriter, Andy Bechtolsheim, wrote a check for $100,000 to an entity that doesn’t exist yet: a company called Google Inc.
According to David A. Vise and Mark Malseed , authors of the book ‘The Google Story’: “Brin and Page had no interest in building a standard company. Their offices resembled student dorm rooms more than corporate headquarters. But licensing their technology did not bring in the expected revenues and they struggled with the decision to sell advertising. They tried, but failed, to get companies to pay fees to search. Next, they wrestled with how ads might affect their core service: free Internet searches. After studying advertising services, they chose to sell highly targeted advertising, showing “sponsored links” (paid ads) on the right-hand side of the search response page.
They developed a new way to rank ads based on how much advertisers offered to pay and how often users clicked on the ads, breaking with the tradition of giving top-paying ads the best billing. The ads ranking highest on both metrics rose in presentation order and the others fell. Google charged advertisers only when someone clicked on an ad, giving advertisers an innovative way to measure their return on investment.
So… Enough with that… What are Larry Page and Sergey Brin thinking for the near future? What are the priorities of the Mountain View based company?
In order to establish a list of priorities, let’s listen to the main actors of the company. Eric Schmidt, CEO of Google and a former member of the Board of Directors of Apple, said in an interview for CNBC: “Our number one priority is (end-user–end-user) happiness. Literally, are people happy with the results that they get using Google search? So it’s literally (search) (…) That’s our number-one priority, even more important, for example, than advertising”.
So here we have two of the main guidelines: gaining market share by means of a great product and advertising. All this is linked to a much shorter term goal: figuring out how to make money out of Youtube. In this sense, Schmidt added in the same interview: “Google believes that advertising itself has value. The ads literally are valuable to consumers. Not just to the advertisers, but the consumers”.
Taking a look to Google’s main acquisitions in the last years will confirm that they are on the right path. Out of the 70 companies acquired by Google between February, 2001 and May, 2010, the ones involving the largest amounts of money were a video sharing company (Youtube; October, 2006), an online advertising company (Double click; April, 2007, $3,100,000,000) and a mobile advertising company (AdMob; November 2009, $750,000,000). So it’s pretty logical that Google tried to make some money out of it.
So the statement repeated time and again in the computer industry seems to be true: the future of computing is mobile and that’s the reason why Google is creating mobile applications that will be interoperable and secure, another big issue for the near future.
Finally, and in order to get another clue about Google’s priority, let’s see what Stephanie Tilenius, former head of eBay’s Marketplaces business and now Google Vice President of Ecommerce, has to say about it. According to her “the company has adopted a “Mobile First” strategy, emphasizing the growth of Android, and Google’s presence in the app market. Other priorities for growth include Social, Personalization and Local” (6 May 2010).
According to Google, one-half of new Internet connections are on mobile devices, while one of every six minutes spent on the web is on social interactions. Small business is clearly a big part of Google’s ecommerce strategy.
Greenlighthouse's Blog 